Tax Cuts! - Page 6

derekgas · 27-11-2008, 07:48

Quote:

Originally Posted by Neil

So is it only VATable when you give it to them hot? You could give it to em cold and let them add the hot water themselves

They would just ask who provided the hot water, and charge it anyway.

derekgas · 27-11-2008, 07:51

Quote:

Originally Posted by claytonender

Are you sure that you are paying VAT on tea, coffee and sugar. In fact I have just checked on the Makro website and they have both Tea and Coffee pn promotion and clearly state they are zero rated for VAT.
http://www.makro.co.uk/metro_mail/mc...ailer_16pp.pdf

If you bought your tea, coffee and sugar from a wholesaler the items should be marked as zero rated.

I think the reason that Marshalls were slapped with a big bill for providing free brews to staff is that the brews were not being declared as a 'benefit in kind' for the employees. As you are no doubt aware there is an annual limit to the what an employer can give an employee as a 'benefit in kind' before the employee becomes liable for PAYE on the benefit. However if an employer fails to deduct PAYE correctly they then become liable to pay for the PAYE owed.

I dont do the accounts, but as far as I am aware, it is because they are hot brews, and as you say, a benefit in kind, so you pay vat on the stuff that wasnt charged vat originally.

derekgas · 27-11-2008, 07:57

Quote:

Originally Posted by Royboy39

You should'nt lose out at all....The invoice that you prepare is a service you provide and the date you raise the invoice.
You will not have to pay VAT at the old rate.
A £10,000 investment at the current 5% if your lucky, earns £500 per annum.
Let's not forget that you hold funds due to the Government for the same amount of time.

If an invoice was issued today for work carried out then the Vat applicable would be at 17.5%.
If an invoice was issued for job done on 1st December the Vat applicable would be at 15%.
If you have quoted for a job and the invoice date is of today then you would be quite within your right to charge at 17.5%.
Dont forget this would have to be declared and paid as output to the revenue.

I agree with that roy, and I dont actually do the accounts, but am assured that this reduction is costing us in one way or another, I assumed it was on work which carried over the reduction date, whatever the reason, the accounts people aint chuffed about it, some of it is because to do it by the book, they will ultimately be changing the prices then altering the national insurance contributions, then it will all change again next year, so in more ways than 1, it is costing small business rather than helping them.

claytonender · 27-11-2008, 08:36

Quote:

Originally Posted by Neil

That is ok if they have no stock when it changes back. As I am sure they will have stock on the shelves they will have to change all the prices again.

I still say a lot of small shops won't change the price and will just in effect increase the net price instead.

It is probably quite true that small shops won't cahnge their price downwards and increase the nett price. However on 1 January 2010, when VAT is increased they would have to prove to a VAT inspector that they had decreased their nett price ptherwise they will have to increase the gross price then.

derekgas · 27-11-2008, 09:37

Quote:

Originally Posted by claytonender

It is probably quite true that small shops won't cahnge their price downwards and increase the nett price. However on 1 January 2010, when VAT is increased they would have to prove to a VAT inspector that they had decreased their nett price ptherwise they will have to increase the gross price then.

There is a thought isnt it, haha, claytonender, are you trying to pee my accounts people off more than they are already?

jaysay · 27-11-2008, 10:05

Quote:

Originally Posted by claytonender

Well I have news for you I don't stick my head in the sand and I do watch news programmes. How many small to medium businessmen have you spoken too about the 'problem'. I have been speaking to a lady who owns 2 small businesses in Accrington this evening, who stocks hundreds of items and she does not forsee there being any problem at all.

How do you think businesses coped in the past when VAT rates were altered?

I take it that you are experienced in Accounts and therefore well able to comment on the matter.

I probably know more people in business than you've had hot dinners (plus VAT) I think there is to much static on Radio Jones at the moment, switch off and please try later. I can't see the point in a temporary reduction of two and a half percent when most high street shops are already cutting up to 70% on goods that are VAT registered all ready. If there was VAT on food I could just about understand it, but at the moment I can't see the point, and to borrow Billions of pounds to do it is crazy. This exercise is more about saving Gordon and Alistairs skin rather than helping the nation through a crisis which in part was manufactured in Downing Street, as economists with no political axe to grind have said, we are one of the least prepared countries in the World to enter into this recession

MargaretR · 27-11-2008, 10:14

I saw a tv prog earlier this week which explained that governments raise money on international bond markets.

The programme said that USA was in hock to China for a fantastic amount, and US living standards would plummet if China demanded it back.

It didn't go into detail about our debt, but I imagine the Saudies have lent to us on a big scale.

These massive debts must affect foreign policy don't you think?

MargaretR · 27-11-2008, 10:24

Quote:

Originally Posted by MargaretR

I saw a tv prog earlier this week which explained that governments raise money on international bond markets.

The programme said that USA was in hock to China for a fantastic amount, and US living standards would plummet if China demanded it back.

It didn't go into detail about our debt, but I imagine the Saudies have lent to us on a big scale.

These massive debts must affect foreign policy don't you think?

BBC iPlayer - This World: American Time Bomb

andrewb · 29-11-2008, 17:41

Margaret, I too watched the assent of money, it was very informative.

Subway now have two tier pricing. If you have a cold sandwich, there is no VAT. If you have that sandwich toasted, they have to charge VAT. Therefore the price of a cold sub of the day retains the £1.99 price, however if you choose to heat it, it costs £2.19.

Now it may be me, but 20p is neither 17.5% nor is it 15%. Anyone any clues?

cashman · 29-11-2008, 18:24

Electricity costs also?

derekgas · 29-11-2008, 18:34

It will likely be the cost of the contents of the sandwich, heated, but the bread is still served cold (on paper anyway), so the charge is for the hot contents only.

lancsdave · 29-11-2008, 18:44

I did read about this somewhere, and it's because the VAT man has clamped down on Subway. Although the rise is because of the vat the reason it doesn't cost £1.99 plus vat is because they knew customers wouldn't stand the price hike of 35p for warming it up, but on the other hand if they served a £1.99 sub heated then they would lose 30p to the vatman so they ended up making a loss on them. They came up with the 20p so it became close to break-even as they could make it whilst not putting to many customers off.

andrewb · 29-11-2008, 18:47

I see, so they're giving a cut of the £1.99 to the tax man rather than keeping it in the business, but a smaller cut as it's offset by the additional 20p? Hehe.. The notice within Subway is quite amusing.